deQuiz - Prove your knowledge and get prizes!

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0) Which formula do automated liquidity protocols use, also called the constant product formula?

x * y = k-1

x + y = k

x * y = k

x * y - 1 = k

1) What is the concept of "impermanent loss" in liquidity pools in DeFi?

An impermanent loss caused by market volatility

The fee paid to participate in a liquidity pool

A potential loss of value due to the price variation of assets in the pool

A profit increase from providing liquidity

2) How do liquid staking protocols benefit stakers?

They provide a higher staking reward than normal staking

They allow users to stake tokens while maintaining liquidity, represented by liquid staking derivatives

They provide governance rights without staking tokens

They enable cross-chain staking across multiple ecosystems

3) What is the main difference between centralized finance (CeFi) and decentralized finance (DeFi)?

CeFi relies on intermediaries, while DeFi operates without intermediaries through smart contracts

CeFi is open-source, while DeFi is private and permissioned

DeFi allows only institutional investors, while CeFi is for retail investors

DeFi is slower and more expensive than CeFi

4) In a decentralized lending protocol, what happens if a borrower fails to repay a loan?

The collateral provided by the borrower is liquidated to cover the loan

The loan is forgiven after a certain period

The protocol increases the interest rate until the borrower pays

The lender is compensated by the protocol

5) What is the primary function of liquidity providers (LPs) in DeFi?

To provide new tokens to the ecosystem

To provide liquidity for staking

To set exchange rates between cryptocurrencies

To provide liquidity to trading pools in exchange, generally for a portion of the trading fees

6) What does "slippage" refer to in the context of a decentralized exchange (DEX)?

The probability of trade failure

The difference between the expected price of a trade and the actual price at which it is executed

The net loss during the trade

The fee charged by a liquidity provider for providing liquidity

7) Which of the following risks is associated with using smart contracts in DeFi?

Regulatory risks

Centralized control by a single authority

Low transaction throughput

Smart contract bugs or exploits leading to loss of funds

8) What is the main advantage of decentralized exchanges (DEXs) over centralized exchanges (CEXs)?

They offer higher leverage for margin trading

Users have full control over their funds without relying on a centralized authority

They have faster transaction speeds than centralized exchanges

DEXs offer more fiat trading pairs than centralized exchanges

9) How much Ether (ETH) was stolen during the 2016 hack of The DAO?

50,000 ETH

2.8 million ETH

3.6 million ETH

150,000 ETH

September Champions Week #1: DeFi

So sad :(